diff --git a/ICSharpCode.Decompiler/CSharp/CSharpDecompiler.cs b/ICSharpCode.Decompiler/CSharp/CSharpDecompiler.cs
index 276b5bbdb..0c67e1035 100644
--- a/ICSharpCode.Decompiler/CSharp/CSharpDecompiler.cs
+++ b/ICSharpCode.Decompiler/CSharp/CSharpDecompiler.cs
@@ -105,6 +105,7 @@ namespace ICSharpCode.Decompiler.CSharp
 				new SwitchOnStringTransform(),
 				new SwitchOnNullableTransform(),
 				new SplitVariables(), // split variables once again, because SwitchOnNullableTransform eliminates ldloca 
+				new IntroduceRefReadOnlyModifierOnLocals(),
 				new BlockILTransform { // per-block transforms
 					PostOrderTransforms = {
 						// Even though it's a post-order block-transform as most other transforms,
diff --git a/ICSharpCode.Decompiler/CSharp/Transforms/DeclareVariables.cs b/ICSharpCode.Decompiler/CSharp/Transforms/DeclareVariables.cs
index a3b5168c5..41600de3d 100644
--- a/ICSharpCode.Decompiler/CSharp/Transforms/DeclareVariables.cs
+++ b/ICSharpCode.Decompiler/CSharp/Transforms/DeclareVariables.cs
@@ -447,6 +447,9 @@ namespace ICSharpCode.Decompiler.CSharp.Transforms
 					} else {
 						type = context.TypeSystemAstBuilder.ConvertType(v.Type);
 					}
+					if (v.ILVariable.IsRefReadOnly && type is ComposedType composedType && composedType.HasRefSpecifier) {
+						composedType.HasReadOnlySpecifier = true;
+					}
 					var vds = new VariableDeclarationStatement(type, v.Name, assignment.Right.Detach());
 					var init = vds.Variables.Single();
 					init.AddAnnotation(assignment.Left.GetResolveResult());
diff --git a/ICSharpCode.Decompiler/ICSharpCode.Decompiler.csproj b/ICSharpCode.Decompiler/ICSharpCode.Decompiler.csproj
index 2b37941d5..9f2c10d1b 100644
--- a/ICSharpCode.Decompiler/ICSharpCode.Decompiler.csproj
+++ b/ICSharpCode.Decompiler/ICSharpCode.Decompiler.csproj
@@ -328,6 +328,7 @@
     <Compile Include="IL\Transforms\HighLevelLoopTransform.cs" />
     <Compile Include="IL\Transforms\NamedArgumentTransform.cs" />
     <Compile Include="IL\Transforms\IntroduceDynamicTypeOnLocals.cs" />
+    <Compile Include="IL\Transforms\IntroduceRefReadOnlyModifierOnLocals.cs" />
     <Compile Include="IL\Transforms\NullPropagationTransform.cs" />
     <Compile Include="IL\Transforms\ProxyCallReplacer.cs" />
     <Compile Include="IL\Instructions\StringToInt.cs" />
diff --git a/ICSharpCode.Decompiler/IL/ILReader.cs b/ICSharpCode.Decompiler/IL/ILReader.cs
index f840dce25..cef0c023a 100644
--- a/ICSharpCode.Decompiler/IL/ILReader.cs
+++ b/ICSharpCode.Decompiler/IL/ILReader.cs
@@ -190,12 +190,15 @@ namespace ICSharpCode.Decompiler.IL
 					// and needs to be converted into a normally usable type.
 					declaringType = new ParameterizedType(declaringType, declaringType.TypeParameters);
 				}
-				parameterVariables[paramIndex++] = CreateILVariable(-1, declaringType, "this");
+				ILVariable ilVar = CreateILVariable(-1, declaringType, "this");
+				ilVar.IsRefReadOnly = declaringType.GetDefinition()?.IsReadOnly == true;
+				parameterVariables[paramIndex++] = ilVar;
 			}
 			while (paramIndex < parameterVariables.Length) {
-				IType type = method.Parameters[paramIndex - offset].Type;
-				string name = method.Parameters[paramIndex - offset].Name;
-				parameterVariables[paramIndex] = CreateILVariable(paramIndex - offset, type, name);
+				IParameter parameter = method.Parameters[paramIndex - offset];
+				ILVariable ilVar = CreateILVariable(paramIndex - offset, parameter.Type, parameter.Name);
+				ilVar.IsRefReadOnly = parameter.IsIn;
+				parameterVariables[paramIndex] = ilVar;
 				paramIndex++;
 			}
 			Debug.Assert(paramIndex == parameterVariables.Length);
diff --git a/ICSharpCode.Decompiler/IL/ILVariable.cs b/ICSharpCode.Decompiler/IL/ILVariable.cs
index 4d3fca31d..60423625c 100644
--- a/ICSharpCode.Decompiler/IL/ILVariable.cs
+++ b/ICSharpCode.Decompiler/IL/ILVariable.cs
@@ -131,6 +131,11 @@ namespace ICSharpCode.Decompiler.IL
 				type = value;
 			}
 		}
+
+		/// <summary>
+		/// This variable is either a C# 7 'in' parameter or must be declared as 'ref readonly'.
+		/// </summary>
+		public bool IsRefReadOnly { get; internal set; }
 		
 		/// <summary>
 		/// The index of the local variable or parameter (depending on Kind)
@@ -371,6 +376,9 @@ namespace ICSharpCode.Decompiler.IL
 		
 		internal void WriteDefinitionTo(ITextOutput output)
 		{
+			if (IsRefReadOnly) {
+				output.Write("readonly ");
+			}
 			switch (Kind) {
 				case VariableKind.Local:
 					output.Write("local ");
diff --git a/ICSharpCode.Decompiler/IL/Transforms/ILInlining.cs b/ICSharpCode.Decompiler/IL/Transforms/ILInlining.cs
index db8c47fea..c1a5de160 100644
--- a/ICSharpCode.Decompiler/IL/Transforms/ILInlining.cs
+++ b/ICSharpCode.Decompiler/IL/Transforms/ILInlining.cs
@@ -329,7 +329,7 @@ namespace ICSharpCode.Decompiler.IL.Transforms
 			switch (inst.OpCode) {
 				case OpCode.LdLoc:
 				case OpCode.StLoc:
-					if (IsReadonlyRefLocal(((IInstructionWithVariableOperand)inst).Variable)) {
+					if (((IInstructionWithVariableOperand)inst).Variable.IsRefReadOnly) {
 						return ExpressionClassification.ReadonlyLValue;
 					} else {
 						return ExpressionClassification.MutableLValue;
@@ -363,7 +363,7 @@ namespace ICSharpCode.Decompiler.IL.Transforms
 			}
 		}
 
-		private static bool IsReadonlyReference(ILInstruction addr)
+		internal static bool IsReadonlyReference(ILInstruction addr)
 		{
 			switch (addr) {
 				case LdFlda ldflda:
@@ -372,7 +372,7 @@ namespace ICSharpCode.Decompiler.IL.Transforms
 				case LdsFlda ldsflda:
 					return ldsflda.Field.IsReadOnly;
 				case LdLoc ldloc:
-					return IsReadonlyRefLocal(ldloc.Variable);
+					return ldloc.Variable.IsRefReadOnly;
 				case Call call:
 					return call.Method.ReturnTypeIsRefReadOnly;
 				case AddressOf _:
@@ -383,19 +383,6 @@ namespace ICSharpCode.Decompiler.IL.Transforms
 			}
 		}
 
-		private static bool IsReadonlyRefLocal(ILVariable variable)
-		{
-			if (variable.Kind == VariableKind.Parameter) {
-				if (variable.Index == -1) {
-					// this parameter in readonly struct
-					return variable.Function.Method?.DeclaringTypeDefinition?.IsReadOnly == true;
-				} else {
-					return variable.Function.Parameters[variable.Index.Value].IsIn;
-				}
-			}
-			return false;
-		}
-
 		/// <summary>
 		/// Determines whether a variable should be inlined in non-aggressive mode, even though it is not a generated variable.
 		/// </summary>
diff --git a/ICSharpCode.Decompiler/IL/Transforms/IntroduceRefReadOnlyModifierOnLocals.cs b/ICSharpCode.Decompiler/IL/Transforms/IntroduceRefReadOnlyModifierOnLocals.cs
new file mode 100644
index 000000000..d75d3096b
--- /dev/null
+++ b/ICSharpCode.Decompiler/IL/Transforms/IntroduceRefReadOnlyModifierOnLocals.cs
@@ -0,0 +1,57 @@
+// Copyright (c) 2018 Siegfried Pammer
+// 
+// Permission is hereby granted, free of charge, to any person obtaining a copy of this
+// software and associated documentation files (the "Software"), to deal in the Software
+// without restriction, including without limitation the rights to use, copy, modify, merge,
+// publish, distribute, sublicense, and/or sell copies of the Software, and to permit persons
+// to whom the Software is furnished to do so, subject to the following conditions:
+// 
+// The above copyright notice and this permission notice shall be included in all copies or
+// substantial portions of the Software.
+// 
+// THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED,
+// INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
+// PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE
+// FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR
+// OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER
+// DEALINGS IN THE SOFTWARE.
+
+using System;
+using System.Collections.Generic;
+using System.Linq;
+using System.Text;
+using ICSharpCode.Decompiler.IL.Transforms;
+using ICSharpCode.Decompiler.TypeSystem;
+
+namespace ICSharpCode.Decompiler.IL
+{
+	class IntroduceRefReadOnlyModifierOnLocals : IILTransform
+	{
+		public void Run(ILFunction function, ILTransformContext context)
+		{
+			foreach (var variable in function.Variables) {
+				if (variable.Type.Kind != TypeKind.ByReference || variable.Kind == VariableKind.Parameter)
+					continue;
+				// ref readonly
+				if (IsUsedAsRefReadonly(variable)) {
+					variable.IsRefReadOnly = true;
+					continue;
+				}
+			}
+		}
+
+		/// <summary>
+		/// Infer ref readonly type from usage:
+		/// An ILVariable should be marked as readonly,
+		/// if it's a "by-ref-like" type and the initialized value is known to be readonly.
+		/// </summary>
+		bool IsUsedAsRefReadonly(ILVariable variable)
+		{
+			foreach (var store in variable.StoreInstructions.OfType<StLoc>()) {
+				if (ILInlining.IsReadonlyReference(store.Value))
+					return true;
+			}
+			return false;
+		}
+	}
+}
diff --git a/ILSpy/Languages/CSharpHighlightingTokenWriter.cs b/ILSpy/Languages/CSharpHighlightingTokenWriter.cs
index ddd989831..66fdacbe6 100644
--- a/ILSpy/Languages/CSharpHighlightingTokenWriter.cs
+++ b/ILSpy/Languages/CSharpHighlightingTokenWriter.cs
@@ -194,7 +194,6 @@ namespace ICSharpCode.ILSpy
 				case "event":
 				case "extern":
 				case "override":
-				case "readonly":
 				case "sealed":
 				case "static":
 				case "virtual":
@@ -203,6 +202,12 @@ namespace ICSharpCode.ILSpy
 				case "partial":
 					color = modifiersColor;
 					break;
+				case "readonly":
+					if (role == ComposedType.ReadonlyRole)
+						color = parameterModifierColor;
+					else
+						color = modifiersColor;
+					break;
 				case "checked":
 				case "unchecked":
 					color = checkedKeywordColor;